New York Stock Exchange and German Rival Merge

So the rumor about the merger between the New York Stock Exchange and Germany’s largest stock exchange turned out to be true. On Tuesday, NYSE Euronext and the Deutsche Borse announced they were merging. The deal will create the largest stock exchange in the world. It may also create more volatility in the market and potentially lead to more investment bubbles. So while the deal makes sense for the exchanges, whether it turns out to be a good thing for investors is another story.

While they are calling the deal a merger, it is really a takeover. The Deutsche Borse will hold 10 of the 17 seats on the combined companies new board. The companies, though, have not agreed on a name yet, something Senator Chuck Schumer has been making a fuss about.

The deal values the NYSE at $10 billion, meaning the stock exchange founded under a buttonwood tree in 1792 is worth just a fifth of Facebook.